‘KOSPI 6,000’ slips out of reach again on inflation fears

KOSPI down 2.7% to the 5,700 range

Powell: “Possibility of a policy-rate hike”

Foreigners net sell 1.882 trillion wonMarket Inside

The KOSPI fell nearly 3%, sliding back to the 5,700 level. Analysts said investor sentiment retreated sharply after inflation fears resurfaced amid the U.S.-Iran war and comments pointing to the possibility of a U.S. policy-rate hike.

On the 19th, the KOSPI closed at 5,763.22, down 2.73% from the previous session. Just one day after surging more than 5% and breaking above 5,900, it gave back much of those gains and failed to return to the “KOSPI 6,000” level. By stock, all of the top 10 companies by market capitalization were unable to avoid declines, including Samsung Electronics (-3.84%), SK hynix (-4.07%), Hyundai Motor (-4.22%) and LG Energy Solution (-3.26%).

The day’s drop was driven by renewed inflation fears in the U.S. Overnight, the U.S. central bank (Fed) held the policy rate at 3.50–3.75% at the Federal Open Market Committee (FOMC) meeting, then revised its economic projections, raising its forecast for inflation this year to 2.7% from 2.4%. Fed Chair Jerome Powell said, “Rising oil prices due to the Middle East conflict have lifted inflation expectations.”

As the Middle East situation intensified after Israel bombed Iran’s largest gas field, the South Pars gas field, international oil prices (WTI) neared $100 a barrel.

Powell’s acknowledgment that “there was discussion during the meeting about the possibility of a policy-rate hike” also weighed on sentiment, as higher rates raise funding costs and hurt equities. Some also raised the possibility that the Bank of Korea could keep rates on hold for an extended period or consider hikes in response to rising oil prices and a shift in the U.S. monetary-policy stance.

By investor type, institutional investors, who posted a record net buy of 3.1092 trillion won the previous day, flipped to net selling of 665.9 billion won. They net sold Samsung Electronics and SK hynix, which they had bought heavily the prior session, by 224.8 billion won and 150.7 billion won, respectively. Foreign investors, who had registered net buying of 888.7 billion won the previous day, net sold an even larger 1.882 trillion won—more than twice that amount. Retail investors supported the market with net buying of 2.4106 trillion won.

Reporter Kang Jin-kyu josep@hankyung.com